News in brief: EU, Europe, Brexit, AEI

News in brief
News in brief

UK exporters over-reliant on European market

While SMEs want to access opportunities in emerging and growth economies, they remain dependent on EU markets, suggesting that SMEs could be disproportionately affected if Britain votes to leave the EU in the upcoming referendum.

Over four fifths (82%) of UK SMEs see European markets as important to their future growth (52% say it’s very important), and a quarter (24%) describe themselves as a European business, according to a study by commercial insurer RSA. More than half (56%) of SMEs complain that uncertainty around Brexit is already holding back their growth and 55% say that the Government is not supportive in dealing with Brexit, with two thirds (66%) calling for greater clarity now on the UK’s future role in Europe.

Three-quarters (74%) of SMEs believe the perception that small businesses are local by default is outdated and damaging, with the same proportion saying that international growth is important to their business and nearly nine in ten (88%) stating that international growth is increasingly important to SMEs as a whole.

But while 85% of small business leaders believe SMEs are more globally-minded than ever before, the export potential of SMEs is bounded by the EU – with 72% of UK SMEs struggling to export beyond EU borders. The New Internationals study reveals major barriers to seizing global growth opportunities, particularly outside of the EU, including red tape (62%), lack of funding (58%), lack of access to information (53%) and their own lack of international experience (61%). Three quarters of SMEs say that there is less support available when exporting to emerging economies, despite the considerable growth opportunities they present.

Exporters must ensure AEI compliance

Individuals with overseas assets have less than a year to ensure their tax affairs are in order, or they risk facing a nasty shock, warns one independent financial advisory organisation.

The warning from Andrew Oliver, a senior area manager within deVere Group, comes ahead of the Automatic Exchange of financial account Information (AEI) being implemented from January 2017.

Almost 100 countries across the world have signed up to, or are in the process of doing so, the OECD’s new Common Reporting Standard (CRS). Oliver explains that, under this new global information-sharing Standard, all participating countries are required to obtain financial information from their financial institutions’ clients and to automatically exchange that information annually with other jurisdictions.

“This exchange should not be a problem for the overwhelming majority of people as they are most likely already compliant. However, there’s a huge lack of awareness of the new system and this is extremely concerning,” he said.

The first AEI will relate to financial information from 1st January 2016, and anyone with overseas assets should ensure that their tax affairs are in order sooner rather than later.

Oliver concludes: “Of course, there will still be a raft of legal, cross-border measures available to mitigate tax burdens. However, people with assets in different jurisdictions will need to ensure that all financial planning strategies are fully compliant with the new Common Reporting Standard.

“Those who are in doubt would be wise to seek specialist cross-border financial advice as soon as possible.”